Permanent Reductions of Commitments Clause Samples
The "Permanent Reductions of Commitments" clause defines the process by which a borrower can irrevocably reduce the total amount of credit available under a loan agreement. Typically, this clause allows the borrower to notify the lender of their intention to decrease the committed loan amount, after which the reduction becomes effective and cannot be reversed. This mechanism is often used when the borrower determines that they no longer need access to the full credit facility, thereby reducing their obligation to pay unused commitment fees. The core function of this clause is to provide flexibility for the borrower to manage their financing needs while also allowing the lender to reallocate capital as commitments are reduced.
Permanent Reductions of Commitments. The maximum permitted amount of Aggregate Commitments and the maximum permitted aggregate Outstanding Amount and the maximum permitted amount of Total Outstandings shall be permanently reduced from time to time by all amounts paid to the Agent for the accounts of the Lenders from: (a) the cash proceeds of the Approved Dispositions; (b) the cash proceeds of any “Federal Refunds,” as such term is defined in the Eleventh Amendment; (c) the cash components of the “Mandatory Events” (as defined below); and (d) any other cash principal repayments received from time to time by the Agent for the accounts of the Lenders. The respective Commitments of the Lenders shall be permanently reduced on each date of the receipt of any such cash proceeds on a pro rata basis to reflect proportionately among the Lenders the application of such cash payments to the Loans. The Lenders shall have no obligation to reinstate their Commitments after any such reductions or to readvance to the Borrower as proceeds of the Loans any sums which have been repaid upon the Loans.
Permanent Reductions of Commitments. The maximum permitted amount of Aggregate Commitments and the maximum permitted aggregate Outstanding Amount and the maximum permitted amount of Total Outstandings shall be permanently reduced from time to time by all cash principal repayments received from time to time by the Administrative Agent for the accounts of the Lenders, including without limitation the cash principal repayments required to be made in accordance with the terms of Section 6 of this Amendment. The respective Commitments of the Lenders shall be permanently reduced on each date of the receipt of each such cash repayment on a pro rata basis to reflect proportionately among the Lenders the application of such cash repayments to the Loans. The Lenders shall have no obligation to reinstate their Commitments after any such reductions or to readvance to the Borrower as proceeds of the Loans any sums which have been repaid upon the Loans.
Permanent Reductions of Commitments